Seeing the future of waste

SITA Chief Executive David Palmer-Jones updates Owen McQuade on his plans for the province and the company’s perspective on waste management as an experienced player in the industry.

When the privatisation of waste services was under way in England in 1988, local government professional David Palmer- Jones ‘saw the future’ and joined a newly-formed waste management company at its inception. After almost 20 years with SITA, Palmer-Jones became its Chief Executive in the UK this September.

Learning from experience and taking a long-term view are important elements for a business in the waste management sector. SITA itself is almost 90 years old and started up as a utilities company after the First World War in Paris; its initials stand for Société Industrielle des Transports Automobiles. Suez Environnement, SITA’s parent company, has a track record going back to 1880, when the oldest firm in its group, La Société Lyonnaise des Eaux et de l’Eclairage, was formed to manage the water supply in Cannes.

“We’ve been around for a long, long time. It probably suits the sectors that we’re in. The sectors are stable, important sectors delivering the essentials of life,” Palmer- Jones remarks. SITA has moved on from delivering privatised municipal collection and street cleansing services to acquiring other waste firms, notably United Waste and the American BFI group of companies.

In the UK, it has 6,000 employees and an annual turnover of £800 million. The company collects waste from domestic, commercial and industrial customers and its operations go through to recycling and other forms of waste treatment, including energy-from-waste.

“SITA itself in the UK has been a key driver in specifically the PFI market, which is really the alteration of the infrastructure of waste within the UK,” he continues. “Legislation from Europe is a key driver to the changing terms of landfill diversion. The whole of the UK’s authorities are tasked with moving from an old-fashioned form of infrastructure, in the form of landfill, to modern technology in the form of first recycling, secondly mechanical and biological treatment methods, organic methods, and finally extracting energy from the residue that’s left over after a balanced approach to waste management has taken place.”

SITA’s presence in Northern Ireland started more than 10 years ago when United Waste was part of an application for an energy-from-waste project in the Belfast area. The project did not come to fruition, but United Waste stayed on in Northern Ireland and started its own business in the province. SITA then acquired Wilson Waste in June 2007 and, at present, it works across the whole of Northern Ireland.

“Our ambition is to expand across the whole of Northern Ireland and we feel we’ve got a good turnover of £10 million and 90 employees to give us a good base to expand what we do here. And we’re obviously interested in the opportunities that are being presented at the moment in terms of changing infrastructure,” he remarks.

Acquiring one of the public-private partnerships which are going out for tender from Northern Ireland’s local authorities would give SITA the opportunity to expand its offer into treatment and higher technology solutions. The province’s 26 district councils have clustered into three waste management groups which will procure waste management services for their respective areas.

Changes

Turning to the changes that the industry has seen over the past 20 years, he highlights the influence of Europe as a key driver. Across the European Union, the move from landfill to other forms of technology has been achieved in different ways. Some countries use legislation or other forms of regulation whereas others use fiscal methods such as taxation, which he notes is a “clever way of changing behaviour”. As an example, the UK Government has recently increased the landfill tax escalator to £24 over the next three years.

The risk of fines from Europe if local authorities do not reach landfill diversion targets (LADTs) on time has been another prompter for them to press ahead with new technologies, but he notes that the landfill tax escalator is becoming a more important factor in their thinking.

“We’ve seen recently the landfill tax escalator almost taking over from the threat of LADTs – the penalties coming in the future – because many authorities are already part-way through [meeting their targets]. Their plan is to change and the landfill tax is the key driver because that’s hitting them where it hurts in their pockets and it’s hitting them very quickly.”

SITA understands that the Government is planning to further increase the landfill tax escalator, potentially to a figure of around £80 a tonne, at which point all other forms of treatment would become more realistic. The average household produces 1 tonne of waste per year. Landfill would be left as the most expensive form of treatment.

Vocabulary

Technological change is evidenced by the different vocabulary now used to describe waste. As the movement towards new technology in the UK is more influenced by legislation and tax than cultural attitudes, he expects this to take place more quickly.

“It just starts to come into the vocabulary in the UK but if you listen to Northern Europe, it’s a completely different vocabulary. They don’t use the term waste anymore and we will get to that point in the not too distant future,” he remarks.

Part of this vocabulary can be summed up in the ‘value chain’ involved in waste management. Outlining this concept, he explains: “First you’ve got to re-use. Second you’ve got to recycle as much as you can; the targets now are very high in terms of recycling – up to over 50 per cent. You’ve then got to utilise the organic fraction as a soil substitute or as a form of energy and soil substitution with anaerobic digestion.

“Then for us, it’s important to extract the very final element of energy within the residual to then produce electricity or heat for the local area that it’s based [in]. Then you get an extremely efficient, technologically-efficient, environmentally efficient and robust solution in my view.”

On his visits to Northern Ireland, Palmer- Jones has been struck by how energy is such a major topic of conversation. He sees energy-from-waste as a “key element” in supplying part of the province’s future energy mix, which can include providing heat separately from electricity. His vision is for an energy from- waste plant which can power a district heating system, using the heat which it creates.

“District heating is difficult to retrofit but looking out the window I think you’ve got some key establishments here, big hospitals, big industry that could utilise it in a way that does not overly disturb the basic infrastructure that you’ve got,” he says.

“Historically as a nation we have tended to not use that in the most intelligent way. If I could give Northern Ireland advice on how it could do that, I think it would be useful not to squander that real resource and see what can be done in this regard.”

Investment

As a business, SITA is confident in investing in the province: “Our acquisition of Wilson’s over a year ago was a key indicator that we feel that Northern Ireland for us and, even though we’ve been here for a considerable amount of time, has a long-term future for us.”

Looking to the future of Northern Ireland’s waste industry, he emphasises that the speed of delivering the new infrastructure is key.

“What we have tried to do when we have built our partnership now, to make the next step into Northern Ireland, is we’ve really tried to find people who can give a robust delivery. We’ve put together what we think is a very interesting grouping of both international and local [people] and that’s the way we’ve always gone about it,” he continues.

“We spent quite a long time choosing partners. It’s also for me an empathy. We need to feel, because we’re going to partner people for a long period of time, we need to believe in our values and share our values together,” he adds.

“Really the big message for us is we’ve got a safe pair of hands, we’ve got real trust in terms of the people we put together. I think we’re going to be able to deliver some deliverable and innovative solutions for all of the options that present themselves now.”

Flexibility

When the right infrastructure is put in place, he is confident that Northern Ireland’s waste problem will be “sorted”. One of the keywords brought up by politicians, when talking about waste, is “flexibility” in the relationship to which they are signing up. In his view, this is best developed as trust and empathy builds within the relationship between local government and the contractor.

It’s “extremely important”, Palmer-Jones says, that any problems are “dealt with early on in the discussions”. The world will change over the contract’s timeframe “and the authorities should, through construction of the contact but also their relationship, be able to suggest alterations and move with the times”, he states.

“For us, it’s more than a contract, it’s a long-term relationship and we have to make it work. Being ultra-constrained by the contract is difficult over such a long period of time. There’s a lot of trust on both sides when you get involved in longer term deals.”

Despite stereotypes in some parts of the media, waste “really is quite an interesting industry to be involved in” and Palmer- Jones sees it as “leading environmental change”. Technologically, waste is also going from “quite a basic industry to a highly sophisticated industry” and SITA, as a company, believes in the changes that have to take place to manage waste in a better way.

As the discussion draws to a close, Palmer-Jones emphasises that SITA sees the waste issue as something more than a company interest and it wants to be “part of the debate” around how society deals with what it leaves behind.

“Some of the decisions to make and introduce new technology are not easy for politicians because people are slightly suspicious, they don’t understand, it’s new, they haven’t seen it before. There’s quite a lot to do in terms of winning hearts and minds in all areas of the UK, to explain to them this is a new, exciting industry that we work within.”

Profile: David Palmer-Jones

David Palmer-Jones is Chief Executive Officer of SITA UK. A Leeds man, he is an economist by background and started off working in local government in his home city. He has more than 23 years’ experience in the recycling and waste management industry, and has worked for the global Suez Environment group for over 20 years.

David returned to SITA UK as Operations Director for its industrial and commercial division in mid-2006 and was appointed Chief Executive in September 2008. Prior to rejoining SITA UK, where he began his career, David spent 12 years working for the group in Europe. He was Chief Executive at SITA Scandinavia and also worked at SITA France.

Now living in Buckinghamshire, David’s main passions are his family and following the fortunes of Wasps Rugby Club.